In Bresse Syndics Inc. v R, 2021 FCA 115, the Court was asked whether “New CO2” was a CCPC. Its sole shareholder was a trust whose trustees, legally, had to be directors of a public corporation (with whom New CO2 had a research agreement). The Court held that the public corporation had de facto control of New CO2 because the corporation had the ability to remove a trustee simply by terminating that person’s tenure as a director of the public corporation.
This decision was rendered for a year that ended before new subsection 256(5.11) became effective.
Friedlan and Friedland “Bresse Syndics Inc.: De Jure Versus De Facto Control” 21:4 Tax for the Owner-Manager (October 2021)
Postscript added January 4, 2022: For a discussion critical of this decision, see Nicholas Arrigo, “Troubling Interpretation of De Jure Control” (2020) 10:2 Canadian Tax Focus, 4-5.
